England 12/08/2013 – As global financial institutions close their doors to small businesses, new funding models are being established and used.
Increasingly, firms are changing who they approach when they want additional funding to grow their business. They are realising that, in most cases, approaching traditional financial institutions is a waste of time. The majority of applications for loans are turned down and the small business owner ends up having wasted a lot of time and energy putting together a business plan, making the application and waiting around for an answer. In many cases, the opportunity they are seeking additional funding for has passed. In today’s competitive trading environment firms need to be able to move quickly in order to take advantage of a business opportunity and secure growth.In Liverpool investment funds are coming from an unusual source. The city is benefiting from being in the catchment area of the MSIF who have been investing in Merseyside-based businesses since 1994.
Over the years they have provided funding for 1,450 businesses in the area. In total, they have invested £139 million and 13,700 jobs have been created as a direct result of money obtained from the MSIF fund. In addition, the team has been able to bring in a further £251 million private money. For the city of Liverpool and its local businesses this injection of funds has been critical. In a time of recession, many local firms have been able to not only to survive, but also thrive.
They have been able to help firms across the board, which has meant that the jobs created are across a range of sectors. The new jobs created have, therefore, gone to people from all backgrounds and from all parts of the city. Of course, much of the money that these new employess have earnt has been spent in the city bringing further benefits to local businesses.
A funding model for the future?
The fact that MSIF is a local and independent organisation, which is not bound by national policy, has helped it to recognise opportunities, which traditional funding sources would otherwise have dismissed. Those who work within the organisation believe that their funding model is one that other cities could also potentially benefit from.
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